Political Tidbits

Wisconsin political news for clients and colleagues.

Previous issues of Political Tidbits can be found at Tidbits Archive.
Click here to begin your free subscription.

Jan. 29, 2009

On Wednesday, Jan. 28, Gov. Doyle delivered his State of the State address, and the news is not good. Projected state revenue estimates are lower than expected and the $5.4 billion deficit could rise even higher according to Doyle. The Governor’s newly created Office of Recovery and Reinvestment is tabbed to move federal money through the state to help ease the pain, but while that stimulus money is expected to help create jobs, the state is still facing significant cuts to programs.

The state legislature kicked off this week by passing an unemployment benefits bill through both houses, and the Assembly passed two bills designed to create jobs in Wisconsin. Legislative proposals are now coming fast and furious as session has started in earnest. In Congress, President Obama’s stimulus package passed the House, albeit on a party line vote. It is now on to the Senate where changes can be expected, although in a timely fashion.

Time will tell as to when the economy will turn for the better, but for now there seems to be no shortage of ideas or money being offered to help it get back on track.

Wisconsin Developments

Doyle Delivers State of the State
The Governor emphasized Wisconsin’s toughness as he delivered a State of the State address Wednesday night under the auspices of a failing economy and rising unemployment. In addition to Wisconsin’s toughness, the Gov. Doyle underscored efforts to work with other state governments and with President Obama.

The Governor stressed, even amidst this economic downturn, his priorities wouldn’t change: Protect schools, provide access to health care for those who need it, and maintain police and fire services.

Gov. Doyle did highlight the newly created Office of Recovery and Reinvestment and introduced its leader, Gary Wolter, the CEO of MG&E. While not getting too specific on details, the Governor did lay out his priorities for state stimulus monies, including:

Repairing roads and bridges
New buildings for groundbreaking research
Fixing crumbling schools
Finding new sources of energy
Cleaning our water
Improving our electrical grid
Broadening internet lines
Building rail lines

While he did outline priorities for a stimulus package, Gov. Doyle declined to lay out any expansions or new state government programs. He did, however, re-emphasize priorities that he has spoken of previously including an autism mandate, the statewide smoking ban, tougher laws on drunk driving and climate change.

The Governor closed by using examples of Wisconsin’s fortitude including how the state recovered from flooding last summer, and more recently, by recognizing the co-pilot from Oregon, Wis., Jeffrey Skiles, who helped bring U.S. Airways Flight 1549 to safety in the Hudson River after birds struck the plane.

In the end, Doyle's speech echoed that of Obama’s inaugural speech by recognizing and addressing the problems we face, but by assuring Wisconsinites that by working together, we can collectively overcome the hurdles we face.

Assembly Passes Jobs Bills
The American Jobs Act and the Wisconsin First legislation are both aimed at supporting companies that create jobs in the state.

Assembly Bill 1, known as “Wisconsin First,” (passed out of committee Jan. 23 as amended) encourages state and local government to make 20 percent of their total purchases from Wisconsin-based businesses.

Assembly Bill 2 requires all contractual services purchased by state executive branch agencies to be performed within the United States.

Both bills passed with strong bipartisan support. The Wisconsin First legislation passed with a 77 to 22 vote; the American Jobs Act passed with a 69 to 30 vote

Unemployment Legislation Passes
The Legislature on Wednesday passed legislation allowing the state to tap into federal funds to cover unemployment compensation claims. The state expects its unemployment compensation fund to run dry next month, which allows it to apply for the federal funds. The state’s fund had a $1.9 billion balance eight years ago.

According to a Legislative Fiscal Bureau report, the state also may have to increase taxes or reduce benefits to bolster the fund's balance.

The bill passed the Assembly on a 96-1 vote, with Republican Rep. Steve Nass of Whitewater casting the lone no vote. The Senate passed the bill 33-0 without debate on Wednesday afternoon and Gov. Doyle is expected to act quickly on it.

Two Bills Introduced to Overturn Supreme Court Decision
The Wisconsin Supreme Court in July 2008 held (4-3) that the economic loss doctrine bars common-law tort claims for intentional misrepresentation in real estate transactions (Below v. Norton, 208 WI 77, 310 Wis.2d 713, 751 N.W.2d 351). Legislation has already been introduced this session in both the Senate and the Assembly seeking to overturn the court’s decision.

Senate Bill 9 and Assembly Bill 6, if enacted, would amend Wis. Chap. 895 by adding a tort cause of action for an intentional misrepresentation made by the seller of real estate. The bills would give purchasers the ability to recoup not only the economic value of the home, but also punitive damages.

Both bills recognize that there are additional remedies already available even though the purchaser and the dissenting justices in the Below case argued that purchasers are not currently protected.

For further analysis of the court’s decision and the effect of this legislation, see Hamilton Consulting Group’s Update, written by Andy Cook.

Judge Upholds Minimum Mark-Up Law
A Dane County judge says Wisconsin’s minimum mark-up law for gasoline does not violate the state Constitution. A Merrill gas station owner had challenged the law after he was forced to stop giving discounts to senior citizens.

The law, known as the Unfair Sales Act, makes it illegal for retailers to sell gasoline without marking it up either six percent over what they paid or 9.18 percent over the local wholesale price - whichever is higher. Violators face stiff fines from regulators and can be sued by competitors for selling gas too cheap.

The Wisconsin minimum mark-up law, implemented in 1939, was intended to prevent integrated oil companies from underselling smaller independent service stations and forcing them out of business by setting a minimum price at which motor fuels must be sold.

Governor Doyle Creates Office of Recovery and Reinvestment
A new state office has been created by Gov. Doyle to quickly move federal stimulus funds to create jobs in Wisconsin. Doyle has appointed Madison Gas and Electric Chairman, President and CEO Gary J. Wolter, to head The Office of Recovery and Reinvestment. The office will distribute federal money for job creation projects and investments in long-term economic growth in Wisconsin after the federal government finalizes a stimulus package.

Although the details of the federal stimulus package are still in development, the Office of Recovery and Reinvestment will continue efforts to explore avenues to deploy funds as well as work with local governments, schools, non-profits and the business community on possible projects that will create jobs and provide long-term investment in Wisconsin.

Legislators to Combat Drunk Driving
Legislation to promote prevention of drunk driving includes a statewide expansion of the Winnebago County “Safe Streets” pilot program, which directs some offenders into alcohol treatment programs. The proposal also expands the use of Ignition Interlock Devices (IID), one of the tools that government has to prevent drunk drivers from getting behind the wheel.

The proposed legislation would:

Make the third OWI offense within five years a felony
Make all fourth OWI offenses a felony
Close the 1st offense .08 fine loophole
Expand Winnebago County’s successful “Safe Street” pilot program
Require the Judicial Council to develop statewide sentencing guidelines for OWI offenses
Mandate Ignition Interlock Devices (IIDs) or immobilization if second OWI offense is .16 or above and for all third offenses
Prohibit IID contractors from cancelling an IID contract without an order from the court.

Bi-Partisan Proposal Would Prevent Raids on User Fee Accounts
A bi-partisan coalition of Wisconsin legislators announced plans to introduce an amendment to the Wisconsin Constitution that would prevent the raiding of segregated funds to fill budget holes. Sen. Jeff Plale (D-South Milwaukee) and Rep. Gary Tauchen’s (R-Bonduel) proposal would prevent Wisconsin governors and legislators from using segregated funds as a piggy bank to solve the state’s fiscal problems.

The proposed constitutional amendment would prohibit the governor and the legislature from transferring, lapsing or expending segregated funds in any manner that would conflict with the purpose of the fund. As with other constitutional amendments, the proposal would need to pass two consecutive sessions and be ratified by the people before taking affect. A previous version of this constitutional amendment passed the Wisconsin Assembly on a strong, bi-partisan 91-6 vote in late 2007.

Examples of segregated funds include: the Common School Fund, which, among other programs provides funding for libraries; the Conservation Fund, which provides funding for sports, recreation, lakes and forests, among others; Environmental Fund; Lottery Fund; Recycling Fund; and Transportation Fund.

Committee Activity and New Legislation
The Senate Labor, Elections and Urban Affairs recently held hearings on SB-1, which would increase the minimum wage to $7.60 and provide for inflation indexing; and, SB-2, making payment of unpaid wages a priority when a company goes out of business.

Sen. Hansen (D-Green Bay) introduced SB-20, which would allow a person who has been discriminated against, or the Dept. of Workforce Development, to bring an action in circuit court to recover damages caused by the act of discrimination, and allows the person to seek compensatory and punitive damages. The bill also requires that 10 percent of the amount of the compensatory and punitive damages be deposited into the general fund and be used for the administration of the fair employment law.

Federal Developments

Doyle Assures Committee that Wisconsin is Prepared to
Spend Stimulus Funds
At a hearing earlier this week, the House Transportation and Infrastructure Committee discussed how the stimulus bill would be used most effectively. As a featured witness, Gov. Doyle testified that the state, cities, and transit authorities would be able to effectively take advantage of the funds within the 90-day deadline.

Advocating for further funding, Doyle spoke partly on behalf of the Passenger Rail Coalition, an alliance of states supporting more intercity passenger rail service. In Wisconsin, the push is aimed at developing a high-speed rail corridor between Milwaukee and Madison and increasing Chicago-Milwaukee service.

Obama Grants California’s Request to Regulate Greenhouse Gases
President Barack Obama today ordered the EPA to reconsider California’s petition to set strict automobile emission and fuel efficiency standards.

Under Section 209 the Clean Air Act, California has special authority to enact stricter air-pollution standards for motor vehicles than the federal government’s standards. However, California must file a petition with the EPA and meet certain criteria. Other states may adopt California’s standards, but those states’ emissions standards only become effective when California’s petition is granted by EPA.